So busy that important developments are flying by? Welcome to the wrap-up of the top ten most popular stories in STEP’s online UK Digests throughout May 2015 as clicked by our readers.
Promoters of asset protection trusts jailed for mis-selling: Eight people have received prison sentences for mis-selling so-called asset protection trusts to elderly clients with a fraudulent promise that the trust plans would protect their homes against local authority residential care charges.
Inheritance tax concession omitted from Queen’s Speech: Bills announced in the new government’s Queen’s Speech include a Finance Bill preventing rises in income tax, VAT and national insurance; a Scotland Bill devolving further tax-raising powers to Holyrood; and an Enterprise Bill to ‘reduce red tape on business’.
Court revokes trust transfer that triggered IHT charges:The England and Wales High Court has agreed to set aside a man’s gift of a house into trust for his daughter that attracted an unexpected inheritance tax (IHT) charge of GBP156,000. Charles Freedman’s advisor had not realised that rules in the Finance Act 2006 meant that the gift would be a lifetime chargeable transfer for IHT purposes, triggering an immediate 20 per cent entry charge plus further ten-yearly and exit charges (Freedman v Freedman, 2015 EWHC 1457 Ch).
Pension freedom will promote trust-based planning: The new freedom to cash in defined-contribution pension pots, introduced in April, is likely to encourage trust-based inheritance-tax planning, according to financial advisors.
Family lose challenge on ‘want of knowledge’ grounds: The family of the late Ronald Butcher has failed to overturn a will in which he left his entire GBP500,000 to a friend. The England and Wales High Court decided that the will was executed with Butcher’s knowledge and approval, in part because he had prepared it himself from a template (Sharp v Hutchins, 2015 EWHC 1240 Ch).
Public Guardian must register LPA despite multiple complex conditionals: The donor of an English lasting power of attorney has the right to impose any number of conditions specifying when and how it can be used, the Court of Protection has declared. Lush J ruled that the Office of the Public Guardian had no right to make a ‘paternalistic judgement’ on behalf of the wealthy donor by refusing to register his LPA (Re XZ, 2015 EWCOP 35).
Rights associated with digital information: The 20th edition of Executors, Administrators and Probate by Williams Mortimer & Sunnucks will include a chapter contributed by New Square Chambers on the administration of digital information as part of the deceased’s estate. An extract is available free from the firm’s website.
Husband’s trust could be varied to provide for wife: The England and Wales Court of Appeal has upheld a decision by Mostyn J in which he awarded a divorcing wife GBP157,000 from a trust of which her husband was the main beneficiary. The husband’s father, who was the settlor, opposed the award on the grounds that the trust was not a nuptial settlement that could be varied under s24 of the Matrimonial Causes Act 1973 (P v P, 2015 EWCA Civ 447).
New tax guidance for property rentals: HM Revenue & Customs has issued an updated version of its guidance on income from rented properties.
Inheritance invalidates ‘needs-based’ foundation in financial provision settlement: A man has lost his share in his former matrimonial home because he inherited GBP180,000 from his father just after separating. The England and Wales Court of Appeal agreed with the man’s former wife that her settlement should be substantially varied in her favour, because the legacy had invalidated the needs-based foundation of the original consent order (Critchell v Critchell, 2015 EWCA Civ 436).
The STEP Industry News Digests provide a round-up of relevant industry news for trust and estate practitioners and other professionals in the wealth management sector. They provide brief summaries of topical news stories gathered from news providers internationally, providing a quick reference for busy practitioners to all the relevant news and issues. The News Digests also feature job listings from our recruitment site and list local STEP branch events and conferences. STEP’s digest services include twice weekly UK and Wealth Structuring (international) editions as well as a bi-weekly North America Digest focusing on the US, Canada and Mexico, and a Latin America Digest.
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